Tuesday, September 22, 2020

Comments on August Existing Home Sales

by Calculated Risk on 9/22/2020 10:29:00 AM

Earlier: NAR: Existing-Home Sales Increased to 6.00 million in August

A few key points:

1) This was the highest sales rate since 2006. Existing home sales are counted at the close of escrow, so the August report was mostly for contracts signed in June and July - when the economy was much more open than in March and April. Some of the increase over the last three months was probably related to pent up demand from the shutdowns in March and April. However, with the high unemployment rate and the high rate of COVID infections, housing might be under some pressure later this year or in 2021. That is difficult to predict and depends on the course of the pandemic.

2) Inventory is very low, and was down 18.6% year-over-year (YoY) in August. This is the lowest level of inventory for August since at least the early 1990s.

Existing Home Sales YoY Click on graph for larger image.

This graph shows existing home sales by month for 2019 and 2020.

Note that existing home sales picked up somewhat in the second half of 2019 as interest rates declined.

Even with weak sales in April, May, and June, sales to date are only down about 3.2% compared to the same period in 2019.

Existing Home Sales NSAThe second graph shows existing home sales Not Seasonally Adjusted (NSA) by month (Red dashes are 2020), and the minimum and maximum for 2005 through 2019.

Sales NSA in August (561,000) were 5.5% above sales last year in August (532,000).